Westpac desperately seeking a cleanskin banker

Position vacant: We are seeking a suitable person to lead a large financial institution. The successful candidate will need management experience at the highest level of Australian banking, strong credentials in risk management, a proven track record in anti-money laundering compliance and governance. Only cleanskins need apply. Please send applications to Westpac's chairman (whoever that might be).

It will be a thin field.

Westpac is on the hunt for a new CEO.Credit: AAP

Thanks to a post-royal commission purge of the ranks of the senior management of Australia’s major banks and financial services companies, there’s plenty of former bankers about but none that fit the cleanskin requirement.

And, in Westpac’s case, those who survived the Hayne inquiry need now to survive the AUSTRAC scandal with their reputations intact.

There’s plenty of former bankers about but none that fit the cleanskin requirement.

Westpac could look outside Australia but would need someone with an intimate knowledge of the local financial services landscape. National Australia Bank just nabbed the last of those, when it hired Ross McEwan from the Royal Bank of Scotland – a former Commonwealth Bank executive who was out of the country during the recent banking scandals.

Any notion that Westpac could recruit a senior executive from the US should also be dismissed given shareholders wouldn’t approve the kind of salary American executives expect.

Two others have been mentioned as local contenders: National Australia Bank's Mike Baird and Medibank Private chief executive Craig Drummond. Baird ruled himself out of contention for the top job at NAB, so he is unlikely to move to Westpac. Drummond could be an outside chance but with very long odds – assuming he is even interested.

Westpac's incoming acting chief executive Peter King. Credit: Louie Douvis

This leaves the two inside contenders: Peter King and David Lindberg.

King must have the inside running at this stage given he has been co-opted into the chief executive’s role on an interim basis. He knows the bank – having been there since the age of 25 – and is a finance person, having most recently been the chief financial officer.

But is he tainted by the AUSTRAC scandal? Some say a little but it’s hard to know.

Shareholders generally see King as a safe pair of hands.

But until this week, King, 49, was set to retire next year and reassess his life. And he hasn’t officially decided to put his hat in the ring for the permanent role.

David Lindberg was the Westpac executive being groomed for the top job. Internally he is viewed as an acolyte to former chief executive Brian Hartzer.

Some consider him a Hartzer 2.0. They both hailed from the First Manhattan Consulting Group and worked together at ANZ before joining Westpac.

Without Hartzer’s patronage, it is not clear whether Lindberg’s chances are as strong. Having said that, the view inside Westpac is that he is still a strong contender.

Westpac's David Lindberg is viewed as Hartzer 2.0 within the bank.Credit: Peter Braig

Meanwhile, if you had to put bets on Westpac’s next chairman, the favourite is Peter Nash.

This isn’t just based on qualification but also through a process of eliminating other board members.

This assumes, of course, Westpac doesn’t go outside the current board to find a new chairman.

It’s worth going back 10 days to the Pre-AUSTRAC (PA) period before the whole neatly choreographed succession plan had been blown up.

Sure, the Westpac board had been battered by the royal commission, directors had lived through the ignominy of receiving a first strike at the 2018 annual meeting but it was still a trophy board.

Its current chairman, Lindsay Maxsted, was set to retire in 2020 and was meant to seamlessly hand the baton to, most thought, Ewen Crouch.

In the wake of the extremely damaging AUSTRAC statement of claim alleging breaches of counter terrorism and money laundering laws, Maxsted has brought forward his departure to the start of 2020.

Shareholders also made it clear that they wanted Crouch’s head on a spike, so the board needs to look for a third in line.

In terms of experience, long-time banker Peter Marriott fits the bill but can be ruled out before being seriously contemplated.

In the first instance, having been on the Westpac board since 2013, he is too tarnished by the AUSTRAC scandal and there are still a couple of large shareholders who say they will vote against his re-election to the board in a few weeks.

And even if none of this were so, Marriott, described as a deep introvert, is not considered to have the personality to fit the chairman’s role, according to people who know him well.

Next on the list of appropriate skills would have been Craig Dunn. But he has AMP legacy issues and received a significant protest vote against him at last year’s annual meeting. Dunn for chairman won’t fly. The remaining directors would all be considered a little green.

Of course Westpac could look outside its own boardroom for a new chairman. But that would steer well clear of convention.